More than 1/3 of New Orleans jobs lost

Katrina cost 310,700 jobs in Louisiana, Mississippi

WASHINGTON (MarketWatch) - More than a third of the jobs in the New Orleans metropolitan area were washed away by Hurricane Katrina, the Labor Department reported Friday.

The storm cost about 310,700 jobs in Louisiana and Mississippi, the government said in its first detailed look at the regional impact of the storms. In Louisiana, nonfarm payrolls fell by 251,000 to 1.68 million. In Mississippi, nonfarm payrolls dropped by 51,700 to 1.08 million. Read the full report.

In New Orleans, nonfarm payrolls fell by 232,000 or 38% year-over-year from 610,400 in September 2004 to 378,400. Nonfarm payrolls dropped by 26.7% in Gulfport, Miss., and by 11.1% in Pascagoula, Miss.

The unemployment rate in Louisiana rose to 11.5% in September from 5.8% in August. It's the largest monthly increase since the government began tracking the data in the 1970s.

The jobless rate in Mississippi rose to 9.6% from 6.8%.

At best, the Labor Department data should be considered a rough guess about employment in the region. The household and establishment surveys took place two weeks after Katrina's Aug. 29 landfall, while the area was still in shock and much of New Orleans was under mandatory evacuation.

The numbers could understate the actual loss of jobs: Many large corporations kept employees on the payrolls temporarily even though they did not work. These workers were counted as employed in September.

When the national employment data were released two weeks ago, the head of the Bureau of Labor Statistics provided a rough estimate of 230,000 jobs lost due to the storm.

The state and regional data imply that the labor market elsewhere in the nation was stronger than expected in September. "With

"Underlying trends in the economy looked strong in September," said John Ryding, chief U.S. economist for Bear Stearns.

A second devastating hurricane, Rita, made landfall on the Texas-Louisiana border on Sept. 24, after the survey period.

The Labor Department has said that a total of 478,000 initial claims for unemployment benefits can be traced to the two storms. About 300,000 more people are collecting jobless benefits than before the storms hit.

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